Connect with us

Technology

The Slowdown in Venture Capital Deals is a Cause for Concern

Published

on

The Slowdown in Venture Capital Deals is a Cause for Concern

Last year, the market for venture capital soared to new heights. A record amount of money was raised, with global funding for VC-backed companies reaching $128.5 billion, a 44% jump from 2014.

However, this impressive annual data doesn’t show the whole picture. The fact of the matter is that the flow of venture capital deals peaked mid-year, and then began to disintegrate in the autumn.

Here’s another look, this time with quarterly data from CB Insights:

VC Deals by Quarter

The data for Q4 is a steep drop off in terms of deal-flow, and this number hasn’t been this low since Q1 of 2013. The better news is that a total of $27.2 billion was raised, which is more or less on par with previous quarters.

What’s Happening?

Venture capital stalwarts have noted that this lack of deals could be a blip on the radar.

“I’m not aware of any VC who pays attention to any quarter to quarter data at all,” Marc Andreessen, a prominent name in venture capital, noted in a Forbes piece.

That said, a sudden slowdown of this magnitude does raise questions. This is especially true given some of the market developments of 2015.

Firstly, this slowdown in venture capital deals has corresponded with the general anxiety and volatility occurring in public markets. Further, it’s also occurring on the heels of several less-than-stellar IPO performances and repeated calls of a tech valuation bubble. Lastly, while 2015 set records in terms of dollars spent in terms of funding, the amount of new capital raised by venture capital funds dipped significantly from 2014 levels.

This evidence would suggest that venture capital firms, as well as those that fund them, are becoming more discriminatory in how they spend their money.

Venture Capital in 2015: At a Glance

Where did venture capital money go to in 2015?

Here are some further charts from Raconteur that show the distribution behind the 100 biggest venture capital deals:

Top 100 Deals by Region

VC Deals by Geography

10 Largest Raises in Digital

Biggest deals of 2015

Digital Deals by Sector
Click image to expand

Biggest deals of 2015

Click for Comments

Technology

Ranked: The Top Startup Cities Around the World

Here are the global startup ecosystem rankings, highlighting the scale and maturity of major tech hubs worldwide.

Published

on

This bar chart shows the top startup ecosystems in the world in 2024.

The Top Startup Cities Around the World

This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.

A richly connected network of founders, venture capital firms, and tech talent are some of the key ingredients driving a startup ecosystem.

As engines of growth, these tech clusters are evolving on a global scale. While the world’s leading startup cities are concentrated in America, several ecosystems, such as Beijing and Seoul, are growing in prominence as countries focus on technological advancement to spur innovation.

This graphic shows the best startup cities worldwide, based on data from Pitchbook.

The Global Startup Ecosystem Rankings

To determine the rankings, each city was analyzed based on the scale and maturity of their startup ecosystem over a six-year period ending in the second quarter of 2023.

Among the inputs analyzed and used to calculate the overall development score were fundraising activity, venture capital deals, and exit value:

RankCityDevelopment ScoreCapital RaisedDeal CountExit Value
1🇺🇸 San Francisco90$427.6B19,898$766.3B
2🇺🇸 New York76$179.9B13,594$171.7B
3🇨🇳 Beijing76$161.2B8,835$279.2B
4🇨🇳 Shanghai73$130.3B7,422$186.8B
5🇺🇸 Los Angeles71$144.6B9,781$181.4B
6🇺🇸 Boston70$117.0B6,044$172.8B
7🇬🇧 London64$99.0B11,533$71.9B
8🇨🇳 Shenzhen63$46.4B5,020$66.3B
9🇰🇷 Seoul61$31.1B6,196$71.0B
10🇯🇵 Tokyo60$26.2B5,590$28.0B
11🇨🇳 Hangzhou59$50.7B3,361$88.7B
12🇺🇸 Washington D.C.55$43.7B2,706$28.2B
13🇺🇸 Seattle54$31.7B2,693$35.6B
14🇸🇬 Singapore52$45.7B4,507$38.0B
15🇺🇸 San Diego52$33.5B2,023$44.7B
16🇺🇸 Austin52$26.4B2,636$22.9B
17🇨🇳 Guangzhou52$24.7B1,700$24.0B
18🇮🇱 Tel Aviv51$21.0B1,936$32.2B
19🇺🇸 Denver51$26.8B2,489$29.9B
20🇩🇪 Berlin50$31.2B2,469$15.9B

San Francisco dominates the pack, with $427.6 billion in capital raised over the six-year period.

Despite a challenging funding environment, nearly 20,000 deals closed, highlighting its outsized role in launching tech startups. Both OpenAI and rival Anthropic are headquartered in the city, thanks to its broad pool of tech talent and venture capital firms. Overall, 11,812 startups were based in the San Francisco Bay Area in 2023, equal to about 20% of startups in America.

Falling next in line is New York City, which raised $179.9 billion over the same time period. Crypto firm Gemini and machine learning company, Hugging Face, are two examples of startups based in the city.

As the top-ranking hub outside of America, Beijing is home to TikTok’s parent company, ByteDance, which is one of the most valuable private companies in the world.

In recent years, much of the startup funding in China is being driven by government-backed funds. In particular, these funds are focusing heavily on “hard tech” such as semiconductor-makers and electric vehicle companies that align with the government’s strategic long-term goals.

Another leading tech hub, Singapore, has the highest venture capital funding per capita worldwide. In 2023, this was equal to an impressive $1,060 in venture funding per person. By comparison, venture funding was $345 per person in the U.S., the second-highest globally.

Continue Reading
Visualizing Asia's Water Dilemma

Subscribe

Popular